Corporate Ownership and Control

British Business Transformed

Brian R. Cheffins

Examines developments in corporate governance from the 17th century to the present day

Evaluates theories of the evolution of corporate ownership and control by reference to developments in Britain

Offers a fresh departure point for explaining patterns of corporate ownership and control by reference to the 'sell side' and 'buy side'

Explains how 'outsider/arm's-length' corporate governance became predominant in Britain during the middle of the 20th century despite various deterrents to investing in shares

Brings the story right up to date by discussing recent episodes of shareholder activism and private equity buyouts of publicly traded companies

Corporate Ownership and Control

British Business Transformed

Brian R. Cheffins

Description

The typical British publicly traded company has widely dispersed share ownership and is run by professionally trained managers who collectively own an insufficiently large percentage of shares to dictate the outcome when shareholders vote. This separation of ownership and control has not only dictated the tenor of corporate governance debate in Britain but serves to distinguish the UK from most other countries. Existing theories fail to account adequately for arrangements in the UK. Corporate Ownership and Control accordingly seeks to explain why ownership became divorced from control in major British companies.

The book is organized by reference to the 'sell side', which encompasses the factors that might prompt those owning large blocks of shares to
exit or accept dilution of their stake, and the 'buy side', which involves factors that motivate investors to buy equities and deter the new shareholders from themselves exercising control. The book's approach is strongly historical in orientation, as it examines how matters evolved from the 17th century right through to today. While a modern-style divorce of ownership and control can be traced back at least as far as mid-19th century railways, the 'outsider/arms-length' system of ownership and control that currently characterizes British corporate governance did not crystallize until the middle of the 20th century. The book brings the story right up to date by showing current arrangements are likely to be durable. Correspondingly, the insights the book offers should remain salient for
some time to come.

Corporate Ownership and Control

British Business Transformed

Brian R. Cheffins

Table of Contents

Preface1. Setting the Scene2. The Determinants of Ownnership and Control: Current Theories3. The Sell Side4. The Buy Side5. Up to 18806. 1880 - 19147. The Separation of Ownership and Control by 19148. 1914 - 19399. 1940 - 1990: The Sell Side10. 1940 - 1990: The Buy Side11. Epilogue: Challenges to the UK System of Ownership and Control

Corporate Ownership and Control

British Business Transformed

Brian R. Cheffins

Author Information

Corporate Ownership and Control

British Business Transformed

Brian R. Cheffins

Reviews and Awards

"This fine survey is a definitive contribution to British business and legal history, but it can also be recommended to anyone trying to understand long-run developments in financial markets and corporate governance elsewhere."
--Leslie Hannah, Business History Review

"Its ideas are too important to be limited to universities and libraries. And, although the focus is on Britain, it has relevance for other economies, not least the US."
--Morgen Witzel, Financial Times

"Cheffin's book is an excellent contribution to the missing debate and literature in the United Kingdom on why the separation of ownership from control occured in the United Kingdom. It provides credible reasons with empirical data to support the findings. there are some useful charts and data by way of support. This book is highly recommended and should be on all bookshelves."
--Dr Saleem Sheikh, International Company and Commercial Law Review, Issue 10, 2009

"A fascinating analytical investigation of a pervasive feature of modern British companies - for those seeking an understanding of how British companies have developed and of the underlying reasons for the governance of British companies, in their historical and economic context, there can be no better place to start than with this book. It has been meticulously and scrupulously researched and is elegantly and engagingly written. Professor Cheffin's book embodies the very best features of academic scholarship and deserves to be widely read and consulted. It comes with this reviewer's strongest endorsement."
--Professor Stephen Girvin, The Journal of Business Law, Issue 7, 2009

"Business historians, economists and, I am sure, a much wider readership will turn repeatedly to this volume for a substantive account of the ownership of British business over the past two centuries"
--Robin Pearson, University of Hull, Business Archives: Sources and History, No 99

"The author states that the book 'offers numerous insights for those interested in comparative corporate governance, for those engaged in the study of British business and economic history and for those intrigued by the relationship between law and markets' (p.24). There is no doubt that the book succeeds in doing this and in doing it exceedingly well."
--Graeme Wines, Accounting History 15.133

"The book offers various insights for advanced students and researchers interested in British business and economic history. And, although it focuses on Britain, the book is a mine of insightful information for those seeking an improved understanding of comparative corporate governance."
--Dionysia Katelouzou, Phd, University of Cambridge, Cambridge Student Law Review